2019-20 Operating BudgetAcademic Council – May 28, 2019

Presented by: Robert Bailey & Pamela Onsiong

Agenda Item 8

Agenda

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❶Strategic planning►Ontario Tech University strategic plan►Update on 2018-19 strategic initiatives►Strategy and values focus►Strategic initiatives for 2019-20►Core performance targets►Integrated strategic planning

and financial cycle

❷ Budget framework►Budget process►Tuition framework - Strategic institutional

reductions►Tuition framework - Strategic unit reductions

❸ Financial overview►Key budget assumptions►Budget metrics►Draft operating budget►Operating revenue/expense analysis►Budget summary by functional area►Risks & opportunities/mitigation

❹Conclusion►Next steps►Questions and discussion

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►Ontario Tech University strategic plan

►Update on 2018-19 strategic initiatives

►Strategic and value focus

►Strategic initiatives for 2019-20

►Core performance targets

►Integrated strategic planning and financial cycle

Strategic planning

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Vision/ MissionPresident

Strategic Priorities

Strategic Goals

Faculty-LevelActions

Chairs and Faculty

AcademicGoalsDeans

Administrative Goals

Unit Managers

Unit-LevelActions

Administrative Staff

20 years

10 years

3 years

annual

Ontario Tech University strategic plan

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Strategic initiatives 2018-19

Stronger Academic Programs - strategic hires (10 TTT, 7 TF) $2.8MIncreased Technology Enhanced Learning Environment $0.5MResearch – increased scholarly activity and dissemination $0.6MPartnerships that increase student and programmatic diversity $1.3MImproving Student Success $0.6MInvestment in physical building and IT infrastructure $2.3M

Unite our community by increasing awareness $1.0M

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Strategy and values focus Agenda Item 8

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Strategic initiatives 2019-20

Strategic Investment Reallocation

Sticky CampusNew Programs (BTech/ Liberal Studies/Nursing) $0.5MStudent Supports (work/study; bursaries; recreation) $0.9MLibrary - creating new space $0.4M

EntrepreneurshipBrilliant & Co-op 3.0 $0.5M

PartnershipsNew Partnership Office $0.1M XContinuing Education/ EAP/ International $1.1M X

Tech FocusVirtual Campus (LMS Renewal, Mobile App) $1.3M XMobile Ride; Math videos $0.1M X

StorytellingBranding $0.7M X

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Core performance targets

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Improvement

Maintain

Full SMA Metrics are available online in the SMA Metrics 2017-18 to 2019-20 Dashboard Report.

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Integrated strategic planning and financial cycle

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Strategic Plan2018 - 2022

Vision, Mission, Values

Strategic Directions

Council

Forecast 2020

ActualsQ2 – Q4

Long Term Financial Plan

2021 – 2030Update 2020 ActualUpdate 2020 Budget

Input new 10yr 2021-2030 Forecast

Q1

Budget 2021

Q3 – Q4

Strategic Direction

Integrated Financial Planning Cycle

Update Long Term Plan

2021 – 203010yr forecast

updatedQ4

Quarterly updates

Integrated Academic

Plan3 yr Plan

Faculty Academic

Plan3 Yr Plan

Support Unit Plan3 Yr Plan

Strategic Mandate

Agreement3 yr Plan

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Budget Framework

►Budget process

►New tuition framework

►Strategic institutional reductions

►Strategic unit reductions

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Budget process

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The University budget model is an incremental model:

In Sep 2018 – Dec 2018,- Base costs rolled forward and fixed cost increases applied - Excess of revenues > expenses allocated strategically through the ASK process in

conjunction with Senior Leadership Team (SLT).

In Jan 2019, the Province announced a 10% tuition reduction for 2019-20 with a freeze in tuition for 2020-21. Impact: shortfall of $9M for 2019-20 and $12M for 2020-21

- Units submitted proposals for budget reductions - Budget Working Group (BWG) reviewed unit proposals which included process efficiencies,

and balanced the 2019–20 and 2020-21 budgets

The 2019-20 budget process is outlined in the appendix on the Development of Draft Budget flowchart

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Tuition framework – Strategic institutional reductions

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2019-20 2020-21$ Mil $ Mil

Total budget (fixed and variable costs) $191.0 $197.0Total variable costs only $136.0 $141.0

Total Tuition Decrease, offset by: ($9.0) ($12.0)

University Priority Fund decrease $1.0 $1.0International tuition increase $0.9 $2.6Capital investment decrease $1.0 $0.0Moving Ground Plane investment $0.0 ($2.0)New hire assumptions $1.0 $3.9Other strategic items ($0.5) ($0.3)

Net unit reduction required ($5.6) ($6.8)

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Tuition framework – Strategic unit reductions

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in 000's2019-20 variable budget expenses

Dept Total 19/20 20/21 19/20 20/21Faculty of ESNS 4,126 (161) (242) (3.9%) (5.9%)Faculty of Business and IT 13,200 (447) (389) (3.4%) (2.9%)Fac. of Social Science & Hum 10,636 (392) (579) (3.7%) (5.4%)Faculty of Education 4,992 (163) (236) (3.3%) (4.7%)Faculty of Health Sciences 13,696 (351) (408) (2.6%) (3.0%)Faculty of EAS 14,318 (459) (699) (3.2%) (4.9%)Faculty of Science 13,001 (334) (501) (2.6%) (3.9%)Graduate Studies 1,919 (73) (73) (3.8%) (3.8%)Outsourced Electives 490 (198) (350) (40.4%) (71.4%)Total Academic/ACRU 76,377 (2,578) (3,478) (3.4%) (4.6%)Office of the Provost 665 (54) (54) (8.1%) (8.1%)Planning and Analysis 4,236 (734) (698) (17.3%) (16.5%)Research, Innovation 2,250 (73) (124) (3.3%) (5.5%)Registrar 6,754 (287) (396) (4.2%) (5.9%)Tuition Set Aside - - - Student Life 1,886 (202) (138) (6.7%) (5.2%)Library 4,538 (160) (276) (3.5%) (6.1%)IT - TELE - - - Total Academic Support 20,330 (1,510) (1,685) (7.4%) (8.3%)Secretariat/ General Counsel 1,697 (94) (94) (5.5%) (5.5%)President 964 (77) (77) (8.0%) (8.0%)Finance 3,314 (121) (166) (3.7%) (5.0%)Central Operations 3 - - OCIS/Leased Space 6,767 (241) (338) (3.6%) (5.0%)IT (excluding TELE) 3,422 (70) (58) (2.1%) (1.7%)External Relations 4,696 (231) (231) (4.9%) (4.9%)Human Resources 2,560 (96) (71) (3.7%) (2.8%)Total Administrative 23,424 (931) (1,036) (4.0%) (4.4%)

Total Purchased Services 14,890 (595) (596) (4.0%) (4.0%)ACE - Non-Commercial 493 (26) (41) (5.2%) (8.2%)Total Ancillary/Comm Exp 493 (26) (41) (5.2%) (8.2%)Total base variable budget 135,513 (5,640) (6,834) (4.2%) (5.0%)

Budget Reductions Total Reduction %

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Financial Overview

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►Key budget assumptions

►Budget metrics

►Draft operating budget

►Operating revenue/expense analysis

►Budget summary by functional area

►Risks & opportunities/mitigation

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Key budget assumptions

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1. Enrolment► Total FTE increase of 160 or 2% to 9,013► FTE for 2019-20 is within the Ministry approved corridor

2. Government Grants► Set at the 2016-17 level as per new funding formula, except for growth in core operating grant in

collaborative nursing ($0.3M) and in graduate grant ($0.3M)

3. Tuition set at new 2019/20 rates► Domestic tuition decreases net $7.4M or 10%► International average tuition increases $0.9M or 6%

4. Salary/wage estimates are based on current and planned contracts, as well as the non-union compensation plan

5. Standard COU space measurement averages 8.3 Net Assignable Space Meters per Full Time Equivalent (NASM/FTE) for Ontario universities► 2019-20 budget is 4.7 NASM/FTE

6. The strategic target set for Student/Faculty ratio is 31:1 ► 2019-20 budget is at 30:1

7. Operating budget includes building reserves of $2M, deferred maintenance of $0.5M, and $1.0M of general operational reserves

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Budget metrics

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2019-20 budget vs

2018-19 budget

Metric 2019-20 Budget/Target 2018-19 Budget 2018-19

Forecast

2019-20 budget vs

2018-19 forecast

Enrolment 9,013 8,853 8,933 Undergraduate Domestic 7,922 7,834 7,950 Undergraduate International 488 468 405 Graduate Domestic 414 379 430 Graduate International 189 172 148

Basic Operating Grant $57.4M $56.8M $57.0M

Student/Faculty Ratio 30:1 29:1 31:1

Domestic Tuition Rate -10.0% 3.0% 3.0% International Tuition Rate 6.0% 4.0% 4.0%

NASM/FTE 4.7 4.7 4.7

Student Success Rate 82.5% 80.3% 82.5%

Positions Filled 98.9% 100.0% 94.6%

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Draft operating budget

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2019-20 Draft Operating

Budget Purchased

Services Debenture TELE ACE Regent Theater Campus ChildCare

Campus Field House and Arena

Total 2019 - 20 Draft Budget

REVENUESOperating Grants 57,438$ 13,500$ $ 70,938

Other Grants 10,146$ 211$ $ 10,357

Student Tuition Fees 79,944$ $ 79,944

Student Ancillary Fees 5,283$ 2,357$ 3,721$ $ 11,360

Revenues from Ancillary Operations 225$ 3,558$ $ 3,783

Expendable Donations 854$ -$ $ 854

Other Revenues 5,108$ -$ 39$ 5,143$ 632$ 812$ 1,714$ $ 13,448

Total Revenues 158,997$ 5,915$ 13,500$ 3,760$ 5,143$ 632$ 1,024$ 1,714$ 190,684$

Funded through Prior Year Revenue 191$ (65)$ 126$

Total Revenue 159,188$ 5,915$ 13,500$ 3,695$ 5,143$ 632$ 1,024$ 1,714$ 190,810$

EXPENDITURES

FT Labour (86,980)$ (7,023)$ (1,110)$ (2,087)$ (103)$ (365)$ (629)$ $ (98,297)

PT Labour (15,659)$ (288)$ (410)$ (107)$ (295)$ (400)$ -$ $ (17,159)

Operating Expenses (42,746)$ (6,461)$ (16,501)$ (1,390)$ (2,877)$ (223)$ (259)$ (978)$ $ (71,435)

Capital Expenses (2,195)$ (939)$ (785)$ -$ -$ -$ -$ $ (3,919)

Total Expenditures (147,580)$ (14,712)$ (16,501)$ (3,695)$ (5,071)$ (621)$ (1,024)$ (1,607)$ (190,810)$

Budget Surplus/(Deficit) 11,608$ (8,797)$ (3,001)$ 0$ 72$ 11$ (0)$ 108$ 0$

* Expendable donations relate to the expendable and interest portion of endowed funds that will be disbursed as awards and scholarships in the budget year.It does not include endowed principal or the new capital campaign.

2019- 20 Proposed Draft Budget (in $'000 s)

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Budget summary - revenue

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Year-over-year total revenue decrease of ($3.4M) or (1.8%)

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Revenue components

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Budget summary - expense

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Year-over-year total expense decrease of ($3.4m) or (1.8%)

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Expense components

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Academic operating expenses

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Department 2019/20 Budget

2018/19 Budget

$'000's $'000's $'000's %Energy Systems and Nuclear Science $4,985 $4,996 ($11) (0.2%)Business and Information Technology $13,067 $12,939 $128 1.0%Social Sciences and Humanit ies $10,272 $10,028 $244 2.4%Education $4,914 $5,345 ($431) (8.1%)Health Sciences $13,213 $12,991 $222 1.7%Engineering $14,480 $14,442 $38 0.3%Science $13,200 $12,939 $261 2.0%Graduate Studies $2,895 $3,202 ($306) (9.6%)Outsourced Elect ives $292 $490 ($198) (40.4%)

Total Academic $77,319 $77,371 ($52) (0.1%)

Year-over-year change

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Academic Support operating expenses

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Department 2019/20 Budget

2018/19 Budget

$'000's $'000's $'000's %Off ice of the Provost  $916 $1,205 ($289) (24.0%)Planning $1,131 $2,160 ($1,029) (47.6%)Research, Innovation & International $2,551 $2,489 $62 2.5%Teaching & Learning  $3,648 $3,620 $29 0.8%Registrar  $6,634 $6,745 ($110) (1.6%)Tuit ion Set Aside  $7,472 $6,889 $583 8.5%Student Life $7,432 $7,043 $389 5.5%Library  $4,415 $4,479 ($63) (1.4%)IT - TELE $3,695 $4,794 ($1,099) (22.9%)

Total Academic Support $37,895 $39,423 ($1,528) (3.9%)

Year-over-year change

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Administrative operating expenses

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Department 2019/20 Budget

2018/19 Budget

$'000's $'000's $'000's %University Secretariat and General Counsel $2,093 $1,691 $402 23.7%

President  $955 $1,037 ($82) (7.9%)Finance  $3,301 $3,252 $49 1.5%Central Operations $4,905 $5,369 ($464) (8.6%)OCIS/Leased Space  $12,963 $13,759 ($796) (5.8%)IT (excluding TELE) $3,893 $3,762 $130 3.5%External Relat ions $4,637 $4,772 ($135) (2.8%)Human Resources  $2,538 $2,566 ($28) (1.1%)

Total Administration $35,285 $36,209 ($925) (2.6%)

Year-over-year change

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Commercial and other operating expenses

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Department 2019/20 Budget

2018/19 Budget

$'000's $'000's $'000's %ACE $5,045 $4,981 $64 1.3%Campus Ice /Campus Tennis Centre $1,607 $1,595 $11 0.7%Daycare   $1,026 $959 $67 7.0%Regent $621 $599 $22 3.6%Purchased Services $15,512 $16,613 ($1,102) (6.6%)Debenture $16,501 $16,501 $0 0.0%

Total Commercial and other $40,311 $41,249 ($937) (2.3%)

Year-over-year change

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Budget Summary by functional area

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15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

% of Total Budget

Academic Academic Support Administrative

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Risks and opportunities/mitigation

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Conclusion

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►Next steps►Questions and discussion

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Questions/discussion

Any questions or comments ?

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